German consumer confidence slips over refugee influx

NOV 27, 20159:42 PM

[BERLIN] German consumer confidence slipped for a fourth month in a row in November as shoppers worried about the impact of a record influx of asylum seekers, a survey found Thursday.

A monthly index calculated by market research firm GfK from questioning 2,000 consumers slipped 0.2 points to 9.4, although the rate of decline had slowed from September and October.

"The persistently strong influx of asylum seekers is causing economic optimism to dwindle further," GfK said in a statement as Germany expects around one million newcomers this year.

About 40 per cent of respondents said they expected unemployment to rise, and most linked the trend to the refugee crisis, although few expected to lose their own jobs.

"The economic mood of citizens currently seems to be much more pessimistic than the real economy is, or how experts judge it to be," with leading economists predicting 1.6 per cent GDP growth next year, said the institute.

Germans' income expectations also fell, but their willingness to spend bucked the trend and rose slightly at the start of the Christmas shopping season, the survey found, pointing to rock-bottom interest rates and low energy prices.

Looking to December, GfK's headline household confidence index was forecast to slip further to 9.3 points.

"Further development of the consumer mood will also depend, among other things, on how consumers will respond to the terrorist attacks in Paris of November 13," the report said.

"If the uncertainty among consumers rises sharply due to the events in Paris and possible further attacks or attempted attacks, and some people, fearing further attacks, shun crowds such as pedestrian zones, this will further weigh on consumer sentiment."

AFP